Reports & Studies

This is an archival or historical document and may not reflect current policies or procedures.

Special Studies

Special Study #4:

The Civilian War Benefits Program

Social Security Bulletin

Volume 60

1997

Number 2

THE CIVILIAN WAR BENEFITS
PROGRAM:
SSA'S FIRST DISABILITY PROGRAM

Larry DeWitt
SSA Historian

With research assistance
by Robert Krebs

Disability benefits under Title II
of the Social Security Act became part of the law in
1956, and Medicare came into being in 1965. We might
assume, therefore, that the first cash disability payments
made by the Social Security Administration (SSA) occurred
sometime around 1956, and the first medical benefit
claims would have been processed sometime around 1965.
(1) But in the early months of 1943, a small team from
the Social Security Board (the organizational forerunner
to SSA (2), and the Public Health Service, began adjudicating
disability claims and medical benefit claims under the
Civilian War Benefits (CWB) program.(3) From March 1943
until the program ended in May 1945, SSA adjudicated
about 1,000 disability claims and assisted in the processing
of thousands of claims for medical-care reimbursement.

The CWB program continues even into the
present day. As of September 1996, there were four CWB
beneficiaries--three receiving survivors benefits and
one receiving partial disability benefits. The total
benefit payout in fiscal year 1996 for this vanishing
program was $14,773. (4)

The idea behind this unique wartime program
was that there are inevitably civilian casualties of
war, civilians who become injured or killed through
some action related to the hostilities of war, and the
intent was to pay disability, survivors, and medical-care
benefits to such civilians. As a Senate report on the
issue described it:

Since the outbreak of the war on December
7, 1941, death and destruction have come not only to
individuals in the armed forces but also to civilians.
. . In the war we are fighting today civilians are also
combatants. The fact that they are civilians has nothing
to do with their safety or the risks they have to take
when the enemy comes. Total war means a war affecting
civilians as well as the military. (5)

These emergency wartime programs gave
SSA its first direct experience with operating a disability
benefit program. Many of the policies and procedures
developed in administering these wartime programs presaged
the later disability program; and the Civilian War Benefits
program contained principles and features that we can
recognize in the disability program of the present day.

Three Programs

There were actually three separate programs
under the broad rubric of the War Civilian Security
program:

Civilian War Benefits, which paid disability,
survivors, and medical benefits to U.S. citizens
and enemy aliens; (6)

Civilian War Assistance (CWA), which
helped with expenses related to evacuations and
repatriation of American citizens; and

Assistance and Services to Enemy Aliens
(ASEA), which helped finance the relocation or internment
of Japanese-Americans, German-Americans, and Italian-Americans
and their subsequent return to their homes after
the war.

The Federal Security Administration (FSA)
was responsible for all three programs, although the
latter two programs were generally run by various other
Federal and State authorities, with funds provided by
FSA. The FSA delegated the administration of the CWB
program to SSA, with the exception of the medical benefits,
which were administered by the U.S. Public Health Service.
Responsibility for the CWB program was in turn delegated
to the Bureau of Old-Age and Survivors Insurance (BOASI).
The CWA and ASEA programs were administered by SSA's
Bureau of Public Assistance. This note focuses on the
CWB program. (6a)

Origin and Development
of the Programs

Following the outbreak of war in December
1941, the entire government, including the Federal Security
Agency and the Social Security Board, was mobilized
in support of the war effort. President Roosevelt had
been given an Emergency Fund by Congress to meet pressing
exigencies in the months leading up to the war. (7)
On February 3, 1942, the Director of the Bureau of the
Budget sent a memo to the President lamenting the piecemeal
approach to the problem of civilian casualties of the
war and urging the use of $5,000,000 from the Emergency
Fund to address the problem. The Director wrote:

Many proposals are being made by various
departments and agencies of the Government to provide
aid necessitated by enemy action to persons residing
in the United States. Some of these proposals are for
piecemeal legislation. . .One proposal, providing for
compensation for. . .workers of the Office of Civilian
Defense, is contained in the Second War Powers bill
(S. 2208, Title VIII) which has been passed by the Senate
and may be enacted without adequate consideration of
the total problem unless prompt action is taken. l think
it is extremely important that instead of enacting a
series of piecemeal bills. . .that a comprehensive plan.
. .be prepared and agreed upon. . .Pending the development
of such a proposal. . .I recommend an allocation from
the Emergency Fund. . Jo the Federal Security Administrator
to handle this problem on a temporary basis until adequate
legislation can be developed. (8)

Three days later, President Roosevelt
created the War Civilian Security Program (so named
by SSA) by sending a letter to the Administrator of
the Federal Security Agency authorizing the expenditure
of these funds for this purpose and specifying the factors
of entitlement for these benefits. This letter was the
only authorizing guidance available. There was no congressional
legislation underlying the creation of these benefit
programs, it was done entirely by executive action.
The President's letter stated:

In order to permit sufficient time
for the study and development of adequate legislation
required because of enemy action which has necessitated
aid to the civilian population, it is necessary that
provision be made for temporary immediate aid. Pending
the development of such legislation, I am asking you,
as Federal Security Administrator, to assume responsibility
for providing temporary aid necessitated by enemy action
to civilians, other than enemy aliens, residing in the
United States: (1) who are disabled; (2) who are dependents
of civilians who are killed, disabled, interned, or
reported as missing; or (3) who are otherwise in need
of assistance or services. This aid may take the form
of cash allowances or temporary provision for hospitalization,
medical care, food, shelter, clothing, and transportation.
(9)

The expectation was that Congress would
follow the President's order with permanent legislation;
but authorizing legislation was never passed. Senator
Claude Pepper (D-FL) did craft a comprehensive bill
(S 2412) that expanded the scope of the programs and
gave them a legislative foundation. Although Pepper
got his bill passed out of the Senate Education and
Labor Committee, it was never enacted into law. Because
of certain problems discovered in the administration
of the CWB program, and given the continued absence
of the expected legislative remedy, FSA approached the
Bureau of the Budget and requested further executive
action to expand the program along the lines of the
Pepper Bill and to clarify certain policy interpretations.(10)
The President expanded the scope of the program by issuing
another letter on October 5, 1942, with modifications
that extended the existing programs to include civil
defense workers and resident enemy aliens in the benefit
program. (11)

The CWB program continued to take claims
until June 30, 1945. Even though new benefit claims
were not processed after that point, those individuals
who were receiving benefits pursuant to a finding of
permanent disability continued to receive benefits;
and survivors benefits continued to be paid. The ASEA
program continued until the end of fiscal year 1946,
and the CWA program until the end of fiscal year 1947.

Benefits

Under the CWB program, disability and
medical benefits were to be paid to affected individuals,
and survivors benefits were to be paid to their families.
There was a 7-day waiting period before a claim could
be filed for disability benefits, and all claims had
to be filed within 1 year of onset. Disability benefits
were not payable to persons younger than age 16. The
program had no connection to Title II, but SSA was to
administer it, since it had the most expertise with
these types of benefits. Benefit amounts were computed
based on past earnings, but were capped within a narrow
range of $20 to $85 per month (table 1). Up to $ 100
was payable for burial expenses.

Temporary and permanent disability benefits,
and full and partial disability benefits were paid,
as well as the reimbursement of all necessary medical-care
expenses. To be eligible for a disability benefit under
CWB, the individual had to be totally disabled (permanent
or temporary), or have a permanent partial disability
of at least 30 percent. In addition, the disability
had to be the result of "enemy action," except
for Civilian Defense Workers, who could qualify without
reference to "enemy action" provided their
disability was the result of an injury sustained in
the performance of their civil defense duties. Those
suffering total and permanent disability could also
qualify for up to $50 a month for attendant-care expenses.

Monthly benefits were payable to the widow,
child, or parent of civilians who died as a result of
enemy action and to the categories of dependents of
Civilian Defense Workers killed in the performance of
their duties.

A lump-sum benefit of up to $100 was payable
as reimbursement of burial expenses. Equitable entitlement
to the lump-sum benefit was allowed if someone other
than the family incurred the expenses. In addition,
similar benefits were paid when the individual was missing
or interned by the enemy.

Exclusions

There were several exclusionary conditions
for benefits under the CWB program. Benefits were not
allowed for:

non-U.S. citizens;

those cases where SSA "determines that it
is not in the public interest to pay such benefits;"

interned enemy aliens;

injuries due to willful misconduct;

disabilities being compensated under another governmental
program;

employees or agents of foreign governments;

individuals during any residence outside of the
United States; or

those persons with multiple accounts.

Proofs and
Claims Procedures

SSA developed claims procedures, disability
rating schedules, and detailed criteria for eligibility,
and distributed a 64-page CWB handbook to its employees.
Claims were taken by local Social Security offices;
and three employees from the Bureau of Old-Age and Survivors
Insurance, along with physicians detailed from the Public
Health Service (PHS), adjudicated the claims for both
disability benefits and medical reimbursements.

Table
1: TABLE OF BENEFIT COMPUTATIONS

Disability
Benefits

Percent of
Monthly Earnings Rate

Minimum*
Benefit
(Earnings rate $45 or less)

Maximum Benefit
(Earnings rate $127.50 or more)

Total Disability

66 2/3 %

$30

$85

Partial Disability

66 2/3 %

multiplied by degree of partial disability

$30

multiplied by degree of partial disability

$85

multiplied by degree of partial disability

Dependents
Benefits

Percent of
Monthly Earnings Rate

Minimum*
Benefit
(Earnings rate $100 or less)

Maximum Benefit
(Earnings rate $150 or more)

Widow or Wife, no
child

30%

$30

$45

With 1 child

40%

$40

$60

With 2 children

50%

$50

$75

With 3 children

60%

$60

$85

With 4 or more children

66 2/3 %

$66.67

$85

1 child, no wife
or widow

20%

$20

$30

2 children

30%

$30

$45

3 children

40%

$40

$60

4 children

50%

$50

$75

5 children

60%

$60

$85

6 or more children

66 2/3 %

$66.67

$85

1 dependent parent

20%

$20

$30

2 dependent parents

30%

$30

$45

* The
Minimum Benefit was also paid in cases where the civilian
casualty was not gainfully employed, that is, where the
monthly earnings rate was zero.

The basic
disability application was taken on a form CWB-1. The
CWB-1 was a two-page application that, in addition to
identifying information, asked the claimant to describe
the nature of his/her injury, the date and place of
the injury, witnesses, when work ceased, and the name
and address of the treating physician. The form was
signed over a penalty clause and witnessed by an SSA
employee or a notary. The CWB-1 was taken in a local
SSA field office and forwarded, along with the medical
evidence forms, to Baltimore for adjudication.

For medical
care, SSA provided the beneficiary with a form CWB-100
authorizing reimbursement of medical-care expenses.
The claimant presented the CWB-1 to the treating source
(rather like a Medicare card), and the treating source
sent the bills directly to Baltimore, where SSA paid
them. For non-medical proofs, such as earnings levels,
SSA relied primarily on existing SSA records.

Disability
Evaluation

Disability
evaluation under CWB was in many respects similar to
that under the later Title II program. The fundamental
concept of disability as used in Title II is that of
a functional impairment of work capacity due to a medically
determinable impairment(s). This same principle animated
the CWB program more than 10 years before it was codified
under Title II. Consider this description of disability
evaluation from the musculo-skeletal rating schedule:

Orthopedic
conditions particularly lend themselves to objective
description in terms of functional impairment and consequently
are more readily visualized and evaluated in terms of
reduced earning capacity or percent of total disability
than many other types of disablement. . .Loss or impairment
of function is the primary consideration in rating disability;
hence the particular need of the staff making disability
ratings is such concrete detailed medical information
as will reveal the extent of the functional impairment.
In evaluating disability the consideration of the rating
staff is not so much the disease or injury per se, but
the relative disability resulting from the disease or
injury. (12)

Determinations
of permanent and total disability appear to have been
more easily made than determinations of partial disability;
although in terms of caseloads, the overwhelming bulk
of allowances were for temporary and/or partial disability.
Extensive instructions were provided, along with a detailed
rating schedule, for evaluating partial disabilities.
The instructions involving total disability are very
sparse and seem to imply that such cases will be obvious
to the adjudicators. In effect, the adjudicators simply
looked to medical evidence; and if in their judgment
the disability was total, that was that. The program
was, in certain respects, more stringent than the later
Title II program. It required a disability with a certain
etiology--only disabilities incurred as the result of
a war-related trauma qualified. At the same time, the
program was much more liberal in its general definition
of disability, in that it awarded both temporary and
partial disability benefits.

Preexisting
Disabilities

Even though
entitlement to CWB required a war-related trauma, this
did not preclude payment for preexisting conditions,
if those conditions were somehow aggravated by a war-related
trauma. The policy was stated in the disability rating
schedule as follows:

It is recognized
that a civilian or a civilian defense worker may have
a previously existing disability which may be aggravated
by enemy action or by civilian defense activity which
by definition may render the disability a compensable
disability. Before consideration can be given to aggravation,
it must be clearly established that an actual increase
in the degree of disability occurred and that the aggravation
was due to enemy action or civilian defense activity.
(13)

Disability
Rating Schedule

The CWB disability
rating schedule adopted the now familiar shortcut of
presumptive disability determinations in specified cases.
Under CWB, an applicant was presumptively entitled to
permanent total disability benefits if he/she suffered
any of the following conditions:

(1) loss
of both feet, or permanent loss of use of both feet;

(2) loss
of both hands, or permanent loss of use of both hands;

(3) loss
of one hand and one foot. or permanent loss of use of
one hand and one foot;

(4) permanent
loss of vision; or

(5) any
disability which requires the individual to be permanently
bedridden.

Because the
CWB program paid partial disability benefits, SSA needed
to consider the development of a rating schedule for
partial disabilities. They first consulted with Wisconsin
State Workmen's Compensation officials who advised adoption
of a rating schedule based on the Veteran Administration's
(VA) 1933 schedule, although not as "liberal"
as that schedule. SSA's Bureau of Research and Statistics
(BRS) was given the job of developing the schedule.
The BRS convened a panel of technical experts from the
VA, Workmen's Compensation agencies, medical experts
from academic and business circles, and Civilian Defense
officials to advise BRS on development of a rating schedule.
The proposal developed by the group called for permanent
partial disabilities to be compensable if the impairment
reached 30 percent of capacity, and had age-based differentials
for workers aged 30 or older (the age differential was
dropped in later considerations). The ratings developed
were in general higher than those under Workmen's Compensation,
but lower than the VA's ratings. This ''in-between"
posture was deliberate. In fact, the age-differential
was dropped because it resulted in ratings higher than
the VA's.

The rating
schedule that was ultimately developed had six sections:

musculo-skeletal

organs of special
sense

the nose and throat

scars and disfigurements

neuropsychiatric disabilities

dental and oral disabilities

The musculo-skeletal
section was developed and distributed first; the other
five sections were introduced later. The development
of the neuropsychiatric section is noteworthy. A special
group of consultants was engaged to consider this section.
The group judged the VA's mental impairment classification
outdated, and it adopted the definitions from the 1942
edition of the "Standard (classified) Nomenclature
of Disease." Reflecting attitudes of the era toward
mental illnesses, the schedule provided benefits for
psychotic conditions only if the person had been hospitalized.
Psychoses were considered total during the hospitalization
and for 3 months thereafter and would be appraised as
partial disabilities thereafter. Psychoneuroses would
only be compensable for 3 months.

One unique
feature of the rating schedule was that it could be
waived if its use were judged to be "inequitable."
Such cases could be submitted to the Social Security
Board for an executive determination.

Multiple
Impairments

The CWB program
considered the effect of multiple Impairments in assessing
disability. When multiple impairments were present,
the percentage of each impairment was first determined
using the rating schedule. Then the combined ratings
table would be used to compute a total percentage of
impairment. The combined ratings table was designed
in such a way that any combination of impairments could
be computed and a percentage ranging from 10 percent
to 100 percent could be assigned to the combined impairments
(Table 2).

Table
2: Combined Ratings Table Used in CWB Program (13a)

5

10

15

20

25

30

35

40

45

50

55

60

65

70

75

80

85

90

95

5

10

10

15

20

15

20

25

30

20

25

30

35

40

25

30

35

35

40

45

30

35

35

40

45

50

50

35

40

40

45

50

50

55

60

40

45

50

50

55

55

60

60

65

45

50

55

55

60

65

60

65

65

70

50

55

55

60

60

65

65

70

70

75

75

55

55

60

60

65

70

70

70

75

75

80

80

60

60

65

65

70

70

70

75

75

80

80

80

85

65

65

70

70

75

75

75

75

80

80

85

85

85

90

70

70

75

75

75

80

80

80

80

85

85

85

90

90

90

75

75

75

80

80

80

80

85

85

85

90

90

90

90

90

95

80

80

80

80

85

85

85

85

90

90

90

90

90

90

95

95

95

85

85

85

85

85

90

90

90

90

90

90

90

90

95

95

95

95

100

90

90

90

90

90

90

90

95

95

95

95

95

95

95

95

100

100

100

100

95

95

95

95

95

95

95

95

95

95

100

100

100

100

100

100

100

100

100

100

Continuing
Disability Reviews

The concept
of Continuing Disability Reviews (CDRs) also was introduced
into the CWB program, although there is little evidence
that CDRs were a significant factor during the program;
and there are no readily available data on the number
of cessations processed. The policy on CDRs was:

1. The
civilian casualty shall as frequently and at such times
as may be required submit a statement of continuance
of disability together with a statement by the attending
physician showing the continuance of the disability.

2. The
civilian casualty shall as frequently and at such times
and places as may be reasonably required, submit himself
to an examination by a medical officer or duly qualified
physician designated or approved by the Social Security
Board. If the civilian casualty refuses to submit to
or obstructs such examination, no benefits shall be
payable. . . (14)

Benefit
Caseloads

The first
claims under CWB were taken in March 1942; by June 1942,
there were 1,307 beneficiaries receiving $34,178 in
monthly payments. These were all dependents of civilians
killed or missing overseas. At the end of 1942, SSA
transferred jurisdiction for 1,258 beneficiaries, and
pending claims on another 180 workers, to the U.S. Employees'
Compensation Commission (USECC) under the provisions
of Public Law No. 784, enacted on December 2, 1942.
This law provided a separate program for employees of
government contractors. As a result, the caseloads under
the jurisdiction of SSA declined precipitously beginning
in January 1943. (There were only 262 CWB beneficiaries
on the rolls by June 1943.)

The first
disability claims were adjudicated in March 1943, 1
year after the program began. New claims were taken
through June 1945, and SSA continued payments for existing
beneficiaries through December 31, 1946, when the remaining
caseloads were also transferred to the USECC.

Through the
end of SSA's involvement with the CWB program, a total
of 896 claims were processed for temporary disability
benefits, and 31 beneficiaries were still receiving
such a benefit on December 31, 1946; and there were
38 beneficiaries receiving permanent disability benefits.
There also were 211 dependents receiving benefits of
various types-- for a total of 280 CWB beneficiaries
in payment status at program turnover. So, we can conclude
that approximately 1,000 disability claims were processed
by SSA during the CWB program. (15) About 4,600 claims
of all types were received during the program. The total
amount of benefit payments made under the CWB program
through December 1946 was $1,028,569. (16)

Social
Insurance as a Model

Since two
Presidential letters were the only authorizing guidance
regarding the CWB program, SSA had an unusual degree
of freedom in formulating operating policies for this
program. As a result, the CWB program ended up with
many policy features that were similar to the familiar
policies in use under the Old-Age and Survivors (OASI)
benefit program of Social Security. For example, the
idea of a benefit computation based on past earnings;
the use of a family maximum in benefit computations;
and equitable entitlement to the burial benefit, all
were policies adapted from the OASI program. The claims
procedure, with the field offices taking benefits claims
and developing evidence and Central Office adjudicating
the claims, was also a system in use under the OASI
program.

In terms of
disability policy, SSA consciously modeled its program
after those in use in the VA and in workers' compensation
programs. Even so, efforts were made to separate CWB
policy from each of these models. Features of disability
adjudication were adopted based on prevailing social
insurance theory of the time. This is evident in the
attitudes toward mental illnesses and in the use of
presumptive disability, multiple impairment schedules,
CDRs, and the like.

Despite marked
similarities between CWB and OASI, and between CWB and
general thinking regarding disability programs, there
is no evidence that the planners at SSA explicitly debated
the appropriateness of applying these existing social
insurance concepts to the CWB program. Instead, they
appear to have simply assumed that the CWB program would
of course operate under standard social insurance precepts.

The
Pepper Bill

Beyond their
tendency to use OASI as a model, the planners at SSA
clearly felt constrained by the assumption of all parties
that congressional legislation was forthcoming. Consequently
they designed the CWB program to track the features
of the pending Pepper Bill, which the Administration
was supporting and which was expected to be the permanent
form of the program. Coverage of resident enemy aliens,
coverage of civilian defense workers, and coverage of
resident workers in the United States were all adopted
from the corresponding provisions in S 2412. There were,
however, some significant deviations from the provisions
of the Pepper Bill in the CWB program that excluded
payments for:

husbands or widowers;

a dependent child
older than 18;

dependent parents
under age 65;

seamen and their dependents;

civilian munitions
handlers injured or killed as a result of accidental
discharge of munitions; and

reimbursement of workers'
compensation for any payments made for injuries
covered by CWB.

Each of these
were provisions of the Pepper Bill and their absence
from CWB represented deliberate policy determinations
made by SSA within the wide scope of its policymaking
authority. This is in itself somewhat remarkable in
that it shows SSA exercising wide policymaking latitude
over a program that had no legislative foundation. Authority
for the entire program could easily be questioned, and
yet SSA felt secure in making substantive policy for
such a program.

Similarities
and Differences Between CWB and Title II Disability

In many respects
the CWB program seems remarkably modern in the sense
that it operated under many of the same principles as
the later Title II disability program. In fact, the
similarities were more numerous than the differences,
although some of the differences were of large magnitude
(Table 3). Certainly, the payment of partial and temporary
disability under CWB is a major difference with Title
II--but on this score some might be tempted to judge
the difference as being in CWB's favor. In any case,
it seems fair to judge the CWB program as a serious
full-fledged disability program.

Although disability
benefits were not part of the original Social Security
Act, there was a widespread view among social insurance
advocates that disability benefits were a logical part
of the "comprehensive package of protection"
that President Roosevelt had called for in announcing
his Administration's initiative to create a social insurance
system. Although the Committee on Economic Security
that drafted the President's proposal did not advance
a disability plan, the staff did publish two studies
examining the issue and the Committee's report recommended
". . . that provision should be made for the further
study of the occurrence of permanent disability and
of measures to furnish protection against this risk."(17)

There was
a determination to encourage expansion of the program
to include disability and there were continuous efforts,
both within and outside of SSA, to achieve this aim.
The all-important Advisory Council of 1937-38 recommended
the expansion of Social Security to include disability
benefits, and SSA's own report cautiously supported
this recommendation. In its February 1939 issue, the
Social Security Bulletin published its first
major study of disability, in which Elizabeth Otey estimated
that on any given day as many as 7 million Americans
were unable to work due to a disability, and Otey made
the case that voluntary disability coverage was not
meeting the demonstrated need. In its January 1941 issue,
the Bulletin featured an article coauthored by
I.S. Falk (the Director of the Bureau of Research and
Statistics) and Barkev Sanders, which attempted for
the first time to estimate the potential size of a program
for permanent disability coverage along lines then being
considered in Congress. The March 1941 issue of the
Bulletin then led with a long policy essay by
Arthur Altmeyer titled "Social Insurance for Permanently
Disabled Workers," in which Altmeyer argued that
"the social insurance method is applicable to the
risk of disability as well as old age." And the
June issue headlined a "special article" by
one of the Bureau's physicians describing how the difficult
problem of making disability determinations could effectively
be handled. (18) It was clear that SSA was steadily
laying the groundwork to argue that the Social Security
Act should be extended to cover disability benefits.

In spite of
all this effort, and the well-documented need for them,
cash disability benefits would not become part of Title
II until more than 20 years after the original Act was
passed. The reasons are many and complex, and no one
explanation is universally accepted. Certainly, there
were powerful political and societal forces in opposition
to this expansion. For example, the American Medical
Association viewed any involvement by the government
in disability decisions as trespassing on the prerogatives
of the physician. Private insurance companies were opposed
to the government offering disability coverage, despite
the fact that the private sector had abandoned this
market following their disastrous losses on disability
insurance during the early 1930s. Indeed, the insurance
companies were certain that the government could not
operate a successful disability program, since they
had found it impossible to do so. Many in Congress were
worried that disability insurance would entangle the
government in a benefit program whose costs could not
be contained. And almost everyone worried about the
problem of"moral hazard," which meant that
it was too difficult to tell if someone was really disabled.
Many people doubted that any sound system of disability
determinations could be devised. (19)

A
Missed Opportunity?

Even under
the weight of all these concerns, SSA found itself in
the disability business during 1943-45. The CWB program
was special in many respects, to be sure, and yet it
was a fairly comprehensive social insurance program
paying survivors benefits, dependents benefits, disability
benefits, and health-care benefits. Prior to the creation
of the CWB program the only similar programs in operation
in the United States were those for veterans, and State-run
workers' compensation programs. But the CWB program
was not just workers' compensation for civilian defense
workers (they were added to the program by the second
Presidential letter), and it was not a program limited
only to veterans. CWB paid its range of social insurance
benefits to any and all American civilians, provided
only that they were in some way harmed by a war-related
trauma. So we could say that this little program represented
in microcosm a large part of the comprehensive Federal
approach to social insurance provision so ardently sought
by the advocates of social insurance. How was President
Roosevelt able to create the CWB program without the
consent of Congress, and how was SSA able to operate
the CWB program, including making many substantive policy
decisions, all without any serious public objection?
The answer is that the CWB program was unique many ways.
First, it was an emergency wartime program and many
government activities were tolerated in the name of
the war effort. Second, it was a small program, involving
only a select group of especially "deserving"
beneficiaries who had become disabled in the service
of their country. It did not cost much money; and finally,
it was temporary, so opposition hardly seemed necessary.

At the same
time, it is important to appreciate that SSA successfully
operated a disability program, including the key sensitive
issue of making disability determinations, for more
than 2 years. Strategies were found to accommodate the
concerns of the medical community; disability determination
schedules were developed; and rigorous procedures and
evidentiary requirements were put in place to guard
against "moral hazard." Familiar disability
concepts were introduced and put into operation that
included presumptive disability, multiple impairments,
waiting periods, continuing disability reviews, and
so forth. In short, SSA was in the disability business
and was successful at it.

It would be
natural then to expect that this early success with
disability would be used by the advocates of expanding
Title II benefits as a foot in the door to get SSA into
the disability business. After all, a plausible argument
could be made that many of the core problems in operating
a disability program had been faced and solved in the
CWB program. And yet this argument was never made. As
World War II was drawing to a close, the Social
Security Bulletin again took up its crusade on
behalf of disability. In its January 1945 issue, just
3 months before the last disability claim was taken
under the CWB program, the Bulletin published two excerpts
from the Ninth Annual Report of the Social Security
Board, on the need for disability and health insurance.
The argument for disability insurance was passionate
and sustained. The Board argued:

. . .
the United States is the only Nation which insures workers
against old age without insuring them against permanent
or chronic disability. . .The vast wage loss from disability
in any given year falls on only a small minority of
all workers' families, though all are subject to risk
of loss. . .Disability insurance, like life insurance
or fire insurance, is a way of distributing the losses
of the relatively few over the many who are subject
to the risk. . . The field organization, wage records,
administrative experience, and other characteristics
of the Federal old-age and survivors insurance system
provide a ready framework for administering benefits
for permanent total disability. (20)

Here was SSA
making the argument that a permanent disability program
was needed and that its experience administering old-age
benefits qualified it to run such a program. SSA's
experience with the CWB program is never mentioned.
SSA simply turned over the CWB program to the Employees
Compensation Commission and went back to its old approach
to the advocacy of disability insurance. The explanation
for this is probably the same as the reason why the
CWB program was so easily created in the first place.
The CWB program was a small, temporary, wartime emergency
program, and as such, it was not seen as having precedential
value in the larger struggle for disability insurance.
Even so, it is surprising that the argument was not
made that the experience with the CWB program proved
SSA could operate a successful disability program. Whether
it would have been persuasive is another matter; but
the fact that it was not even attempted is puzzling.
I think we are entitled to conclude that this failure
to build on the CWB program was a small but significant
missed opportunity for advocates of disability insurance.

Conclusions

Almost as
soon as the Social Security Act was signed, executives
at SSA began a long, determined campaign for disability
benefits. For years, a viable disability program, along
with some form of health insurance, were viewed as the
obvious missing elements in Social Security, and SSA
was conducting research on disability programs and subtly
lobbying for the addition of disability to its existing
programs.

Thus, when
the Federal Security Administrator tasked SSA with the
operation of the CWB program, they were, you might say,
rehearsed and ready. And, quite naturally, the program
SSA devised had many features in common both with the
existing OASI program and other governmental disability
programs. Indeed, as we have seen, there was a remarkable
degree of similarity between the CWB program and the
later Title II cash disability benefits program. Conceptually
speaking, the CWB program can be viewed as a clear intellectual
progenitor of Title II cash benefits. The officials
at SSA who created and managed the CWB program clearly
saw it as being in the social insurance tradition and
as having intellectual roots in existing disability
programs. And yet when it came time to use the experience
with CWB as a "foot in the door" in pursuing
cash disability benefits, that connection was not made.
This failure to retain the CWB program and to use it
to make the case for Title II cash benefits may well
be judged a significant missed opportunity.

In any event,
it is certainly significant that SSA was in the disability
business as early as 1943, long before cash disability
benefits became part of Title II. This largely overlooked
episode in the history of disability benefits at SSA
is yet another intriguing facet of disability's rich
history.

Notes

Acknowledgments:The idea for this note came from conversations
with Mr. Herbert Borgen, whose oral history of the early
years of disability at SSA was an important source of
information about the Civilian War Benefits program
and its significance as an antecedent to later developments
in disability. I also am indebted to Mr. Borgen for
his review of an earlier draft of this note and for
several pertinent corrections/ improvements he suggested.
Professor Edward Berkowitz, Chairman of the Department
of History at George Washington University, also generously
gave of his time to read an earlier draft of this note
and to offer helpful suggestions for increasing the
rigor of my analysis.

The records
of the Civilian War Benefits program are available at
the National Archives II; RG-47, 833.2-847.2, Boxes
342-346. Some portions of the records are also available
in the SSA History Archives at SSA Headquarters in Baltimore.

(1) The first
cash disability payments under Title II were paid in
January 1957 to disabled adult children of retired or
deceased wage earners. Monthly disability payments to
the wage earners themselves were first made in July
1957. Although Medicare was enacted into law in July
1965, the first reimbursement claims were not processed
until July 1966, after the completion of a 1-year implementation
period.

(2) From 1935
until 1946, SSA was known as the Social Security Board
(SSB). As part of the President's Reorganization Plan
of 1946 the Board was abolished and was replaced by
the Social Security Administration (SSA). The three-member
executive board of the SSB was also replaced in favor
of a single Commissioner as head of the agency. Throughout
this note, for convenience, SSA is referred to, rather
than SSB and SSA. The reader should keep in mind that,
technically, it was the SSB rather than the SSA that
was involved in most of the events discussed herein.

(3) In fact,
the first claims under this program, for dependents'
benefits, were paid in March 1942.

(4) The CWB
program formally ended in May 1945, although entitled
beneficiaries continued receiving payments. SSA turned
the remaining caseload over to the U.S. Employees Compensation
Commission (USECC), a sister organization within the
Federal Security Agency, in 1947. The USECC was described
by contemporaries as the "Smithsonian attic"
of Federal programs, since it housed several extinct
programs with lingering beneficiary caseloads. In 1950,
the USECC was abolished and its functions, including
the CWB program, were subsumed by the Department of
Labor. The Department of Labor continues to administer
the CWB program to the present day.

(5) "Civilian
War Benefits and War Relief Act of 1942," Report
No. 1448, from the Committee on Education and Labor,
June 8, 1942, p. 6.

(6) The term
"enemy alien" when used in these programs
meant simply a resident non-citizen of Japanese, German,
or Italian origin.

(6a) (Additional
material not included in the print version of this article)

The CWA
program provided a variety of types
of assistance, everything from food, clothing and shelter,
to language training and transportation. The main effort
involved repatriation of American citizens who were
abroad at the outbreak of the war. For a time, two employees
of SSA's Bureau of Public Assistance were assigned to
the largest ship bringing passengers back to the U.S.;
these staffers made the hazardous journey across the
oceans so they could begin the preliminary work with
the repatriates while the ship was still at sea. A longtime
SSA executive, Jack Futterman, was an unwitting observer
of the CWA program in action. After serving in the Navy
for more than two years in the Pacific, Jack received
a 30-day leave state-side. The only transport available
was a ship repatriating civilians from the Philippines.
The civilians had been imprisoned by the Japanese under
near-starvation conditions and many were frail and undernourished.
So the ship was ordered to make the crossing to California
as slowly as possible while the crew engaged in a massive
feeding program to restore the passengers to health.
As a result, Jack spent a month-and-a-half at sea, eating
ice cream, before he could make it home to start his
30-day leave. (Cf. Futterman, Jack S., SSA Oral History
Interview, 7/26/96. SSA History Archives.)

Since
the main workload of the CWA program involved repatriation
activities, the workloads fluctuated dramatically as
repatriations occurred from particular war zones. The
two biggest repatriations were in 1945 following the
liberation of the Philippines and from Europe in 1946.

Altogether
more than 67,000 individuals were repatriated to the
U.S. under support of the CWA program. Total program
expenditures from April 1942 through June 1948 were
approximately $4.3 million. The CWA program was initially
funded as part of the Presidential Allocations. For
fiscal year 1946-1947 the Congress appropriated funds
for this program as part of the FSA budget even though
there was no authorizing legislation for the program
itself. The Congress made a similar appropriation for
FY 1947-1948 but refused to further fund the program
because of the absence of supporting legislation; so
the program terminated in June 1948.

The main
purpose of the ASEA program
was as a funding mechanism to provide some assistance
to resident aliens who were under government restriction,
such as forced relocation from sensitive defense areas
or even involuntary internment. The FSA was not responsible
for any of the decisions that resulted in these restrictions
on resident aliens, and in some sense, FSA's role was
beneficent in that it paid monetary benefits to the
aliens themselves as well as providing in-kind goods
and services. Typical of FSA's role was the payment
of transportation costs to help previously interned
aliens return to their homes.

One interesting
policy issue that arose during the internment was the
eligibility of the interned aliens for unemployment
benefits. The affected aliens were involuntarily terminated
from their employment and would ordinarily have been
eligible for unemployment. However, the problem was
that the law required the worker to be "available
for work" as a condition to qualify. State unemployment
agencies ruled that interned aliens were not available
for work and hence the State did not have to pay them
unemployment benefits. Since SSA's Bureau of Employment
Security formulated Federal policy for the State unemployment
programs, SSA was called upon to rule on the issue.
SSA determined that, in fact, many of the interned aliens
were able to leave the internment centers on passes
or leaves of various types and could therefore be available
for work. SSA thus ruled that interned aliens could
not as a class be ruled ineligible for unemployment
benefits but that determinations had to be made on a
case-by-case basis as in all other unemployment claims.
(Cf. Document No. 5864 summarizing action of the Social
Security Board on 2/26/43. SSA History Archives.)

Initially,
the ASEA program was funded from the Presidential Allocations.
However, a special appropriation to the War Relocation
Authority also paid some of the program's expenses.
The ASEA program paid approximately $1.3 million to
resident aliens through June 1946 when the program ended.
Approximately 18,000 resident aliens were aided under
the ASEA program.

(7) This special
Emergency Fund was part of the Independent Offices Appropriations
Act of 1942, approved April 5, 1941.

(8) "Memorandum
For The President, Subject: Compensation for Civilian
War Injuries or Dependency Resulting from Enemy Action,"
from Harold D. Smith, Director of the Bureau of the
Budget, to President Roosevelt, dated February 3, 1942,
Franklin Delano Roosevelt Library, copy in SSA History
Archives. This memo not only recommends the $5,000,000
allocation, but it identifies the Federal Security Agency
(FSA) as the appropriate agency of responsibility; and
it outlines the criteria for eligibility in even more
detail than given in the President's subsequent letter.
For example, it states that "A definite schedule
of benefits would be set up, based upon the number and
composition of the dependent family and possibly to
some extent upon the wages of the persons affected by
enemy action." This level of detail and specificity
makes it highly likely that the Bureau of the Budget
had prior contact with FSA on this issue and that FSA
was the source of this initiative, although no documentation
of such prior contact has been found.

(9) Presidential
letter, dated February 6, 1942 (Allocation No. 4270).
Copy available in the SSA History Archives and text
reprinted in the Senate Report referenced in note 5
above.

(10) The Director
of the Bureau of the Budget sent his formal request
to this effect to the President in a memorandum dated
October 3, 1942. "Memorandum For The President,
Subject: Amendment of Allocation No. 42-70, from the
Emergency Fund of the President, from Harold D. Smith,
Director of the Bureau of the Budget to President Roosevelt,
dated October 3, 1942, Franklin Delano Roosevelt Library,
copy in SSA History Archives.

(13a)
(Additional material not included in the print version
of this article)

When multiple
impairments were present, the percentage of each impairment
was first determined using the Rating Schedule. Then
the Combined Ratings Table would be used to compute
a total percentage of impairment. When two impairments
were present the degree of the greater would be read
in the far left column and the degree of the lesser
in the top row, the combined rating would be the value
at the intersection. If there were more than two impairments,
the combined value of the first two would be found and
this combined value would then be read in the left column
and the percentage of the third impairment would be
read in the top row; the intersection would be the combined
value for all three impairments, and so on for any number
of impairments.

(14) "Handbook
of Instructions and Procedures for Payment of Benefits
Under the President's Allocation for Temporary Aid to
Civilians," Social Security Board, January 1, 1943,
Part IV, Sec. 41, SSA History Archives.

(15) We cannot
say with precision that the 934 cases identified in
these data were the total caseload since we do not know
the number of unique individuals who received permanent
disability benefits. In particular, we cannot account
for the possibility of some recoveries and/or deaths
among this beneficiary population over this period.
As a consequence, the estimate of 1,000 cases is probably
fairly close to the real value.

(16) Since
the CWB program was non-statutory, its beneficiaries
were left in a kind of limbo after President Truman
ended the program in May 1945. Current beneficiaries
continued to receive benefits even though the program
had ended. SSA turned the remaining caseload over to
the United States Employees' Compensation Commission
and, ultimately, to the Department of Labor. Under these
circumstances, it was difficult to promulgate new policies
regarding the program. Thus, the $85 maximum benefit
established in 1942 remained in effect until December
1962, when the Secretary of Labor, by executive action,
granted a 50-percent increase to all remaining beneficiaries.
(There were 38 beneficiaries at that point.) In 1973,
the Secretary again authorized a benefit increase of
42.6 percent. These two actions raised the maximum payment
amount to $181.82, where it apparently has remained
ever since. According to the Department of Labor, there
were 21 beneficiaries in 1978; 13 in 1984; and 4 at
the end of FY 1996.

(16a)
(The data in this Table are formatted differently than
in the printed version.)

(17) Letter
of Transmittal and Summary of Major Recommendations
on Health Insurance from the Committee on Economic Security
to the President. Letter dated November 6, 1935. Reprinted
in Edwin Witte's, The Development of the Social
Security Act, University of Wisconsin Press (1963),
p. 208.

(19) A thorough
and authoritative account of the early efforts of SSA
to advocate disability insurance, and the opposition
to this expansion of the program, can be found in Edward
D. Berkowitz', Disabled Policy, Cambridge University
Press (1987). Other explanations of why social insurance
did not expand in the immediate postwar period can be
found in the essay by Skocpol and Amenta, "Redefining
the New Deal: World War II and the Development of Social
Provision in the United States," in Theda Skocpol,
Social Policy in the United States, Princeton
University Press ( 1995).

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